Danneskjold v. Hausrath

• Decision Date: 19 April 1996
• Docket Number: D,No. 95,95
• Parties: 131 Lab.Cas. P 33,377, 108 Ed. Law Rep. 1105, 3 Wage & Hour Cas.2d (BNA) 357 Ragnar E. DANNESKJOLD, Plaintiff-Appellant, v. Robert HAUSRATH, Individually and in his Capacity as Higher Education Opportunity Programs Director and Coordinator of programs of the HEOP Consortium of the Niagara Frontier College; Thomas A. Coughlin III, Individually and in his Capacity as Commissioner of the State of New York Department of Correctional Services; Marion L. Borum, Individually and in his Capacity as the Deputy Commissioner of Program Services for the State of New York Department of Correctional Services, Defendants-Appellees. ocket 95-2062.
• Court: U.S. Court of Appeals — Second Circuit

Page 37

82 F.3d 37

131 Lab.Cas. P 33,377, 108 Ed. Law Rep. 1105,

3 Wage & Hour Cas.2d (BNA) 357

Ragnar E. DANNESKJOLD, Plaintiff-Appellant, v. Robert HAUSRATH, Individually and in his Capacity as Higher Education Opportunity Programs Director and Coordinator of programs of the HEOP Consortium of the Niagara Frontier College; Thomas A. Coughlin III, Individually and in his Capacity as Commissioner of the State of New York Department of Correctional Services; Marion L. Borum, Individually and in his Capacity as the Deputy Commissioner of Program Services for the State of New York Department of Correctional Services, Defendants-Appellees.

No. 95, Docket 95-2062.

United States Court of Appeals Second Circuit.

Argued Oct. 5, 1995.

Decided April 19, 1996.

Appeal from a grant of summary judgment by the District Court for the Western District of New York; David G. Larimer, Judge, dismissing a complaint by a prison inmate seeking unpaid minimum wages under the Fair Labor Standards Act for work performed as a clerk-tutor in a prison education program. Because we hold that the FLSA does not apply to prison inmates who provide services to the prison, we affirm.

James C. Gocker, Rochester, New York, for Plaintiff-Appellant.

Daniel Smirlock, Assistant Attorney General, Albany, New York (Dennis C. Vacco, Attorney General, Peter H. Schiff, Deputy Attorney General, Wayne L. Benjamin, Assistant Attorney General, of counsel), for Defendants-Appellees Coughlin and Borum.

Dennis E. Ward, Williamsville, New York (Brenon & DiVita, Daniel J. Ward, of counsel), for Defendant-Appellee Hausrath.

Before: WINTER, JACOBS, and LEVAL, Circuit Judges.

WINTER, Circuit Judge:

Ragnar E. Danneskjold, an inmate at Attica state prison, appeals from Judge Larimer's grant of summary judgment for appellees, the Commissioner and the Deputy Commissioner of the New York State Department of Correctional Services and the Director of the Consortium of Niagara Frontier. Judge Larimer held that appellant's claim for unpaid minimum wages under the Fair Labor Standards Act ("FLSA" or "the Act"), 29 U.S.C. §§ 201-219, failed as a matter of law because Danneskjold was not an "employee" within the meaning of the statute. In reaching that conclusion, he applied the "economic reality" test set out in our decision in Carter v. Dutchess Community College, 735 F.2d 8 (2d Cir.1984). Judge Larimer also dismissed Danneskjold's claim under 42 U.S.C. § 1983 because that claim depended, in part, on the success of the FLSA claim.

We modify the test established in Carter. ¹ We hold that the FLSA does not apply to prison inmates in circumstances in which their labor provides services to the prison, whether or not the work is voluntary, whether it is performed inside or outside the prison, and whether or not a private contractor is involved. Because Danneskjold worked in an education program that provided rehabilitative services only to inmates, he was not an employee for purposes of the FLSA. We therefore affirm.

BACKGROUND

On appeal from a grant of summary judgment, we view the facts in the light most favorable to the nonmoving party, in this case Danneskjold. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986); Henry v. Daytop Village, Inc., 42 F.3d 89, 92 (2d Cir.1994).

Since 1975, the Consortium of the Niagara Frontier (the "Consortium"), an association of Canisius College, Daemen College, and Niagara University, has offered inmates at Attica Correctional Facility an opportunity to earn college degrees by taking courses while serving their sentences. In addition to a professional teaching staff, the Consortium uses trained student inmates to assist in the administration of the program and to tutor other student inmates. In March 1987, Danneskjold responded to a notice posted by the Consortium seeking a clerk-tutor. After reviewing Danneskjold's application and interviewing him, Consortium personnel requested permission from the Department of Corrections inmate program committee to hire Danneskjold. The program committee approved the Consortium's request.

From March 16, 1987 until October 10, 1988, Danneskjold worked for the Consortium On October 12, 1988, Danneskjold filed this suit, pro se, alleging that as a clerk-tutor he had been an "employee" of the Consortium and, as such, was entitled to receive the minimum wage for any and all hours worked. Based on our decision in Carter, the district court granted appellees' motion for summary judgment on the ground that Danneskjold and the Consortium were not in an employment relationship.

                as a clerk-tutor.   His duties included assisting and tutoring student inmates, assisting professors with academic and curricular matters, and correcting papers.   For this work, the Department paid him between $.95 and $1.45 per day in accordance with the Department's inmate wage system
                

DISCUSSION

On appeal from a grant of summary judgment, we review the ruling de novo. Litton Indus., Inc. v. Lehman Bros. Kuhn Loeb Inc., 967 F.2d 742, 746 (2d Cir.1992). Summary judgment is proper only if, viewing all evidence in the light most favorable to the nonmoving party, there is no genuine issue of material fact, and the movant is entitled to judgment as matter of law. Id.

The minimum wage provisions of the FLSA apply only to workers who are "employees" within the meaning of the Act. 29 U.S.C. § 206(a)(1). The Act defines "employee" as "any individual employed by an employer," id. § 203(e)(1), with certain exceptions not relevant to this case. An "employer" is one who acts "directly or indirectly in the interest of an employer in relation to an employee." Id. § 203(d). The Supreme Court has held that these terms are to be applied in light of the "economic reality" of the relationship between the parties. Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33, 81 S.Ct. 933, 936-37, 6 L.Ed.2d 100 (1961). Interpreting this standard, the Ninth Circuit, in non-prisoner cases, has fashioned a four-factor test to determine the nature of that relationship. The four factors ask whether the alleged employer: (i) had the power to hire and fire; (ii) supervised workers and controlled the conditions of employment; (iii) determined the rate and method of payment; and (iv) maintained employment records. Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.1983).

In Carter, 735 F.2d at 10, we addressed facts similar to those in the instant matter. The prisoner-plaintiff in Carter sought a ruling that his service as a tutor in an educational program for inmates conducted by Dutchess County Community College rendered him an employee of the College for FLSA purposes. The district court held that because the prison maintained "ultimate control" over the inmates, they were not employees within the meaning of the FLSA. Id. at 11.

In reversing the district court, we rejected a per se rule that prisoners may never be considered employees for purposes of the FLSA. Id. at 13. We based that conclusion on three grounds. First, we reasoned that exempting an entire class of workers from the Act's coverage on account of their status could, in some instances, undermine one of the primary purposes of the FLSA: preventing unfair competition among employers if some were able to pay less than the minimum wage. Id. at 13; see also 29 U.S.C. § 202(a). Second, we noted that the statute does not include prison inmates in its specific exemptions from coverage. Carter, 735 F.2d at 13. Third, we reasoned that existing caselaw required a "particularized inquiry into the facts of each case" and that a blanket exclusion of prisoners was inappropriate. Id. Accordingly, we reversed the district court and held that it should apply the four-factor inquiry articulated by the Ninth Circuit in Bonnette as the applicable economic reality test. Id. at 13-14. We implied, but did not hold, that the facts alleged by Carter might be sufficient to warrant FLSA coverage. Carter was remanded for further proceedings but appears never to have been decided on the merits.

Although we do not disturb Carter 's rejection of a rule that a prisoner's labor is at all times and in all circumstances exempt from the FLSA, or discard use of an economic reality test to determine whether such labor is subject to the FLSA, we do reexamine and reject its use of the four-part Bonnette test to make that determination. We do so for three reasons.

First, Bonnette did not involve prison labor and is not well suited to determining the status of that labor under the FLSA. It involved the question of whether the state was the employer of persons, styled "chore workers," who provided state-mandated in-home services to the aged, blind, and disabled. Bonnette held that the state was a joint employer of the chore workers, along with the recipients of their services. In the prison context, however, application of Bonnette leads to a radical result. Literally applied, the Bonnette factors would render all prison labor, including involuntary labor inside the penal institution, such as in a prison laundry, subject to minimum wage laws. No court has ever suggested, much less held, that the FLSA applies to such labor.

Second, because of a quirk of legal history, Carter was decided at a time (1984) when application of the FLSA to common state prison labor was barred by Supreme Court caselaw. In 1974, ² Congress extended the FLSA to cover state and municipal employees. However, in National League of Cities v. Usery, 426 U.S. 833, 852, 96 S.Ct. 2465, 2474, 49 L.Ed.2d 245 (1976), the Supreme Court erected a constitutional bar to the application of the federal minimum wage to state employees. See Wentworth v. Solem, 548 F.2d 773, 775 (8th Cir.1977) (per curiam); see also Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985) (overruling National League of Cities ). It was in this legal context that Carter...